Curaçao’s Licensing Evolution and Prospects

Historically, Curaçao’s gambling licenses were seen as a straightforward solution for many due to the perceived leniency in its regulations and oversight, especially when benchmarked against other global jurisdictions.

Presently, there are four primary Master Licenses in Curaçao.

B2C operators usually seek a sub-license under these Master Licenses, which is somewhat akin to the ‘white label’ model found in other regulated markets. Such a structure often posed challenges for operators, as certain payment providers did not acknowledge the validity of the sub-license. As a workaround, these sub-licensees typically established a subsidiary within an EU nation to facilitate payment processing.

Curaçao is now addressing these regulatory gaps that have previously blemished its reputation in the gambling sector. The country is committed to bolstering its integrity and is set to adopt top-tier standards in gambling operations, with an emphasis on anti-money laundering protocols, fraud mitigation, and ensuring player safety.

The forthcoming legislation, termed LOK, is poised to reshape this perception. The primary goal is to ensure transparent business practices within Curaçao’s gambling industry. Comprehensive due diligence will be mandated to ascertain the identity of business proprietors. Operators will need to provide clear documentation about the origins of funds being channeled into the country. Moreover, all operational procedures will need to be in sync with recognized global standards, particularly concerning anti-money laundering regulations.

Ultimately, Curaçao aims to revamp its iGaming regulatory framework, potentially phasing out the current master and sub-license system altogether.

What is the LOK?

The LOK, also known as the National Ordinance on Games of Chance, is an upcoming legislation that’s currently navigating its way through the parliamentary procedures. It’s anticipated to be officially enacted by the first quarter of 2024. This comprehensive legislation encompasses regulations that are relevant to various gaming activities. This includes stipulations regarding the issuance, suspension, and revocation of licenses, as well as the promotion of responsible gambling. All these regulations will fall under the watchful eye of the CGB. Furthermore, the CGB will be responsible for granting licenses not just to B2C operators but also to B2B suppliers. The latter covers entities offering pivotal services or goods in the gaming domain, such as game providers, platform services, and payment services providers.

Understanding GCB and CGA

Established on April 19, 1999, the Curaçao Gaming Control Board (GCB) was specifically created to serve as the regulatory body for the entire gaming industry in and operating out of Curaçao. Starting from September 1, 2023, the GCB will begin granting direct licenses to gambling operators. These operators will be expected to align with international standards. There’s also an agenda to assimilate these licenses into a forthcoming regulatory framework once it comes into effect.

On the other hand, the LOK introduces a transformative shift in the regulatory landscape by proposing the inception of a new regulatory entity: the Curaçao Gaming Authority (CGA). This newly envisioned authority will be an independent body, designed to replace the existing Curaçao Gaming Control Board. The CGA’s role will be to issue independent licenses for both B2C and B2B entities. For firms already licensed under the prior system, there will be an opportunity to either apply for a new license under the CGA or cease their operations.

When will the new licenses be available?

Starting from 1st September 2023, the Gaming Control Board (GCB) will commence the process of accepting applications for new operational licenses directly from operators. This will be based on the prevailing legislation and not the upcoming LOK, and applications can be made via their designated online platform.

Additionally, at the SiGMA Curaçao event from 25th to 28th September 2023, the GCB conducted a session. This session offered a comprehensive overview of the online portal’s features, highlighted the details of the three distinct application forms, clarified the necessary supporting documentation, outlined the application assessment process, and described the steps to be taken after a license is granted.

Furthermore, the process of transitioning for operators – from the existing sublicense arrangements to the new direct licenses – was thoroughly discussed, ensuring clarity on the matter for all stakeholders.

Understanding the GCB Licensing Procedure

The GCB’s licensing method promises to be user-friendly and uncomplicated. To simplify the licensing journey for operators, the GCB is initiating a specialized online platform for registration and application. This process unfolds in three distinct phases:

• Online Gaming Submission: This entails a comprehensive review of the proposed operational plans, which includes an evaluation of marketing and sales strategies as well as growth projections.
• Personal Declaration: This phase focuses on identifying the primary stakeholders of the business. Ultimate Beneficial Owners (UBOs) holding 10% or more of the business stake are required to present thorough identification details, their Source of Wealth, and Source of Funds. This ensures that these UBOs possess the financial strength to maintain the license, and that their financial sources are legitimate.
• Corporate Disclosures: A Curaçao-based company is the only entity eligible for the license. Hence, comprehensive details about this company must be shared with the GCB during the application.

Once all the required documents and forms are successfully submitted and meet the GCB’s criteria, a license will be granted. Within a span of six months from this issuance, operators are obliged to present audited policies and procedures for further evaluation. It’s imperative that these adhere to the global benchmarks befitting a reputable gambling operator. Under the refreshed Curaçao framework, fundamental standards such as player safety, proactive anti-money laundering (AML) measures, Know Your Customer (KYC) protocols, responsible gambling, and solid technical and informational security systems will be mandated.

Transition Process for Current Operators

To guarantee uninterrupted service, the regulatory authority plans to extend all existing master licenses by one year.

For those currently holding a Sub license, they can opt for one of the following routes:

• Apply for a New Licence with GCB: Existing operators can apply for a new license under the current GCB guidelines. Once approved, these licenses will automatically transition into the new system when it becomes active. Crucially, it’s worth noting that new license holders under this pathway will not have the authority to grant sub-licences.
• Continue under Master Licensee & Await LOK Enactment: These operators can continue their operations under their current Master licensee status and then apply for a new license when the LOK is in effect. A window of 3 months will be given to apply for this new license, and they can operate under the old norms for up to 9 additional months.

The government is committed to ensuring a hassle-free transition for all existing operators eager to embrace the new licensing system, allowing for seamless business continuity.

However, for operators who decide against transitioning to the revamped system, they must conclude their operations as soon as their associated master license reaches its expiration date.